FTC Issues Guidance on Big Data Dos, Don'ts

The Federal Trade Commission has put out guidance to businesses on what uses of Big Data analytics could run afoul of consumer protections as well as those that provide benefits to society.

That came in the form of a lengthy report, "Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues".

“The potential benefits to consumers are significant from the growing volume, velocity and value of data [the Vs that define the 'Big' in Big Data]," said FTC chair Edith Ramirez in releasing the report, "but businesses must ensure that their big data use does not lead to harmful exclusion or discrimination.”

The report looks at the end uses of that ubiquitous collection of data from a variety of sources after it has been analyzed and chronicles such upsides as boosting education, nontraditional access to credit, specialized healthcare and access to employment.

But it also surveys risks, which it identifies as "inaccuracies" about certain groups, exposing sensitive information, targeting vulnerable consumers for fraud, increasing the price of goods in lower-income communities, and reducing consumer choice.

At the CES Show in Las Vegas, where Ramirez was interviewed Wednesday, the chairwoman said that data was increasingly becoming today’s currency and we need to be aware of the impact that has on consumers.

The vote to approve the report was 4-0, with lone Republican Maureen Ohlhausen issuing a separate statement and tweeting about the Big Data positives, she called "massive potential benefits," in the report.

The FTC advised companies to provide the benefits and avoid the pitfalls, suggesting the FTC had an enforcement pit into which they could fall if they don't.

"The Commission will continue to monitor areas where big data practices could violate existing laws, including the FTC Act, the Fair Credit Reporting Act [FCRA] and the Equal Credit Opportunity Act [ECOA] and will bring enforcement actions where appropriate," the FTC concluded.

Responding to the report, privacy advocate Jeff Chester, executive director of the Center for Digital Democracy and one of the leading voice for online privacy protections, said: "The FTC has delivered a sweeping review on how today’s data-driven marketplace poses serious risks to consumers. Our every move—online and increasingly offline—is being stealthily watched, analyzed and used to make decisions about us. The commission’s message is clear—companies must proceed with caution as they use consumer surveillance tools made possible in today’s 'Big Data' era. Every consumer should be alarmed about the host of little publicly known practices that can harm our credit, employment, and privacy. The commission is bringing a much needed 21st century update on how it will enforce important consumer protection laws, including the FCRA and ECOA."